Finland does not export enough

We are all being told that Finland’s economic performance is good with a 3% increase in GDP but when you look at the figures you should understand that our economic performance is not at all so strong as the politicians are telling us.

There are 3 big problems facing Finland and they have to do with exports and the labor market.

Finland’s export performance is considerably below those of our most important competitors, Germany and Sweden, who manage to export today between 46% and 48% of GDP while Finland only achieves 39%. The difference is big in relative and absolute terms. 

Furthermore, too many Finnish small- and medium-sized companies  (SME’s) are too small – 93% of all SME’s having 10 or fewer employees, while the whole SME sector accounts for less than 15% of the total volume of exports. Both figures are well below Germany and Sweden. According to Business Finland In Finland, micro companies (less than 10 employees) account only for 3% of exports. In Sweden, micro companies’ share of exports is 12%, in Estonia 19% and in the UK 14 per cent. Similarly, SMEs’ (less than 50 employees) share of exports in Finland’s is around 11%, in comparison to 21 per cent in Sweden, 36% in Estonia and 22% in the UK.

If we could achieve the same higher levels of exports as Germany and Sweden then we would see strong economic growth. So what is holding us back? The answer appears to be that the SME’s are too small and too risk adverse to export. They do not have the resources or the willingness to jump into the markets. Much more needs to be done by the public sector to guide and support more small companies to grow. 

As far as big companies are concerned, there can be no doubt that they have the resources and willingness to grow but our rather closed and isolated domestic markets have managed to cultivate a engineer’s mindset that is risk adverse and conforms. Many business leaders have poor language skills and have little idea of selling. Your correspondent has many years experience comparing Swedish business leaders against their Finnish counterparts – the difference is huge…

In then labor market we have a poor 71% employment rate. The labor market has relatively fewer women in both management and in boards compared to our Swedish friends. They have a 85% employment rate…

Nothing more needs to be explained…

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